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National Foreclosure Inventory Falls Year Over Year in March

North Dakota Was the Only State to Post an Increase in Foreclosure Inventory

Molly Boesel    |    Mortgage Performance

  • The foreclosure inventory fell 23 percent year over year in March 2016.
  • The seriously delinquent inventory fell 19 percent year over year in March 2016.
  • All states except North Dakota and West Virginia had a decrease in the serious delinquency rate, but the increase was minimal for each of these states.

The national foreclosure inventory – the number of loans in the foreclosure process – fell 23.2 percent year over year in March 2016, according to the latest CoreLogic Foreclosure Report. The foreclosure inventory has fallen on a year-over-year basis every month since November 2011 (Figure 1) and in March 2016 it was 72.7 percent below the January 2011 peak.

The foreclosure rate – the share of all loans in the foreclosure process – fell to 1.1 percent in March 2016, down from 1.4 percent in March 2015. While the foreclosure rate is back to 2007 levels, it is still above the pre-housing-crisis average foreclosure rate of 0.6 percent between 2000 and 2006.

Figure 2 shows that, collectively, judicial foreclosure states[1] continued to have a much higher average foreclosure rate (1.8 percent) in March 2016 than non-judicial states (0.6 percent). The collective foreclosure rate in non-judicial states is close to the pre-crisis rate of 0.4 percent, while the foreclosure rate in judicial states is more than double the pre-crisis rate of 0.8 percent. As of March 2016, judicial states had 42 percent of the nation’s outstanding mortgages but 70 percent of all loans in foreclosure.

Judicial Foreclosure

Judicial Foreclosure

Florida recorded the largest drop in foreclosure inventory, falling by 36.6 percent. North Dakota was the only state in March 2016 to post a year-over-year increase (8.8 percent) in the foreclosure inventory, a possible sign the state is starting to feel the effects of lower oil prices.

The serious delinquency rate – the share of loans 90 or more days overdue – was 3.1 percent in March 2016, down from 3.8 percent in March 2015. The March 2016 inventory of seriously delinquent mortgages fell 19.1 percent year over year. The serious delinquency rate fell year over year in all states except North Dakota and West Virginia, where it increased by 0.1 percentage points in each of those states.

1 In judicial foreclosure states, lenders must provide evidence of delinquency to the courts in order to move a borrower into foreclosure. In non-judicial foreclosure states, lenders can issue notices of default directly to the borrower without court intervention. This is an important distinction since judicial foreclosure states have longer foreclosure timelines, thus affecting foreclosure statistics.

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